Credit Suisse AG was sentenced today for conspiracy to aid and assist U.S. taxpayers in filing false income tax returns and other documents with the Internal Revenue Service (IRS). Credit Suisse pleaded guilty to conspiracy on May 19. The sentencing of the Swiss corporation is the result of a years-long investigation by U.S. law enforcement authorities that has also produced indictments of seven Credit Suisse employees and the owner of a trust company since 2011—two of those individuals have pleaded guilty so far—and of U.S. clients of Credit Suisse. The announcement was made by Deputy Attorney General James M. Cole, Acting Deputy Assistant Attorney General Larry J. Wszalek for the Justice Department’s Tax Division, U.S. Attorney Dana J. Boente for the Eastern District of Virginia and IRS Commissioner John Koskinen.

At sentencing in the U.S. District Court for the Eastern District of Virginia, U.S. District Chief Judge Rebecca Beach Smith entered judgment and conviction and a restitution order requiring Credit Suisse to pay approximately $1.8 billion dollars to the United States by Nov. 28, per the plea agreement. Credit Suisse will pay the Justice Department’s Crime Victims Fund, through the District Court Clerk’s Office for the Eastern District of Virginia, a fine of approximately $1.136 billion and will pay the IRS $666.5 million in restitution. The parties agreed that Credit Suisse cannot challenge the restitution amount, which can also provide a basis for an IRS civil tax assessment.

“Today, with its criminal conviction and the payment of $2.6 billion in fines and restitution, Credit Suisse is held fully accountable for helping U.S. taxpayers engage in tax evasion,” said Deputy Attorney General Cole. “As we expand our offshore investigations, not just in Switzerland, but around the world, the message to banks who engaged in these crimes is clear—step forward, accept responsibility for your past conduct, and help us hold responsible the U.S. taxpayers who benefitted, and the individuals who assisted them. Only through full cooperation will you avoid the most severe sanctions.”

The plea agreement, along with agreements made with state and federal agencies, provides that Credit Suisse will pay a total of approximately $2.6 billion—approximately $1.8 billion in a criminal fine and restitution, $100 million to the Federal Reserve and $715 million to the New York State Department of Financial Services. Earlier this year, Credit Suisse negotiated cease and desist orders with the Federal Reserve and the state of New York requiring the bank to take certain remedial steps to ensure its compliance with U.S. law in its ongoing operations in addition to the civil penalties. Credit Suisse also paid approximately $196 million in disgorgement, interest and penalties to the Securities and Exchange Commission (SEC) for violating the federal securities laws by providing cross-border brokerage and investment advisory services to U.S. clients without first registering with the SEC. Together, these actions by U.S. law enforcement and state and federal partners appropriately punish Credit Suisse for its past behavior in these matters.

As part of the plea agreement, Credit Suisse acknowledged that, for decades prior to and through 2009, it operated an illegal cross-border banking business that knowingly and willfully aided and assisted thousands of U.S. clients in opening and maintaining undeclared accounts and concealing their offshore assets and income from the IRS.

According to the statement of facts filed with the plea agreement, Credit Suisse employed a variety of means to assist U.S. clients in concealing their undeclared accounts, including by:

Assisting clients in using sham entities to hide undeclared accounts;

Soliciting IRS forms that falsely stated, under penalties of perjury, that the sham entities were the beneficial owners of the assets in the accounts;

Failing to maintain records in the United States related to the accounts;

Destroying account records sent to the United States for client review;

Using Credit Suisse managers and employees as unregistered investment advisors on undeclared accounts;

Facilitating withdrawals of funds from the undeclared accounts by either providing hand-delivered cash in the United States or using Credit Suisse’s correspondent bank accounts in the United States;

Providing offshore credit and debit cards to repatriate funds in the undeclared accounts.

As part of the plea agreement, Credit Suisse further agreed to make a complete disclosure of its cross-border activities, cooperate in treaty requests for account information, provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed and to close accounts of account holders who fail to come into compliance with U.S. reporting obligations. Credit Suisse has also agreed to implement programs to ensure its compliance with U.S. laws, including its reporting obligations under the Foreign Account Tax Compliance Act and relevant tax treaties, in all its current and future dealings with U.S. customers.

“Today’s sentencing of Credit Suisse AG holds the bank responsible for its decades-long pervasive conduct of aiding U.S. taxpayers in the commission of tax crimes,” said Acting Deputy Assistant Attorney General Wszalek. “The Justice Department will continue to vigorously pursue our global enforcement efforts against individuals who avoid their tax obligations by hiding their assets in foreign bank accounts, and the financial institutions, bankers, and other professionals who facilitate these crimes.”

“Credit Suisse AG ran an illegal cross-border business which willfully aided U.S. clients in concealing their offshore assets and income from the U.S. government,” said U.S. Attorney Boente. “Simply put, if you are in the business of hiding money from the U.S. government you will be caught, you will be prosecuted and you will pay the price for your crime. The successful prosecution of Credit Suisse AG, and today’s sentencing is representative of the tireless commitment and hard work of this office and our partners at the Internal Revenue Service.”

“Today’s sentencing is yet another striking example of what happens to those who help offshore tax evaders,” said IRS Commissioner Koskinen. “We owe it to the vast majority of honest U.S. taxpayers to tirelessly search for and prosecute those who dodge paying their fair share and the unprincipled professionals who assist them.”

On December 5, two former employees of a Credit Suisse subsidiary will be sentenced for their involvement in assisting U.S. customers to evade their taxes. On March 12, Andreas Bachmann, a former banker at Credit Suisse Fides pleaded guilty to a superseding indictment in connection with his work as a banker at Credit Suisse Fides. On April 30, Josef Dörig, a former Credit Suisse Fides employee and owner/operator of a trust company, pleaded guilty to conspiring to defraud the IRS in connection with his role managing offshore entities used by U.S. taxpayers to conceal their accounts at Credit Suisse. The pleas were accepted by U.S. District Judge Gerald Bruce Lee in the Eastern District of Virginia. Bachmann and Dörig each face a statutory maximum sentence of five years in prison.

Money services businesses (“MSBs”),1 including money transmitters important to the global flow of remittances, are losing access to banking services, which may in part be a result of concerns about regulatory scrutiny, the perceived risks presented by money services business accounts, and the costs and burdens associated with maintaining such accounts.

MSBs play an important role in a transparent financial system, particularly because they often provide financial services to people less likely to use traditional banking services and because of their prominent role in providing remittance services. FinCEN believes it is important to reiterate the fact that banking organizations can serve the MSB industry while meeting their Bank Secrecy Act obligations.2

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If you are a low-to-moderate income worker, you can take steps now to save two ways for the same amount. With the saver’s credit you can save for your retirement and save on your taxes with a special tax credit. Here are six tips you should know about this credit:

1. Save for retirement. The formal name of the saver’s credit is the retirement savings contributions credit. You may be able to claim this tax credit in addition to any other tax savings that also apply. The saver’s credit helps offset part of the first $2,000 you voluntarily save for your retirement. This includes amounts you contribute to IRAs, 401(k) plans and similar workplace plans.

2. Save on taxes. The saver’s credit can increase your refund or reduce the tax you owe. The maximum credit is $1,000, or $2,000 for married couples. The credit you receive is often much less, due in part because of the deductions and other credits you may claim.

3. Income limits. Income limits vary based on your filing status. You may be able to claim the saver’s credit if you’re a:

• Married couple filing jointly with income up to $60,000 in 2014 or $61,000 in 2015.

• Head of Household with income up to $45,000 in 2014 or $45,750 in 2015.

• Married person filing separately or single with income up to $30,000 in 2014 or $30,500 in 2015.

4. When to contribute. If you’re eligible you still have time to contribute and get the saver’s credit on your 2014 tax return. You have until April 15, 2015, to set up a new IRA or add money to an existing IRA for 2014. You must make an elective deferral (contribution) by the end of the year to a 401(k) plan or similar workplace program.

If you can’t set aside money for this year you may want to schedule your 2015 contributions soon so your employer can begin withholding them in January.

5. Special rules apply. Other special rules that apply to the credit include:

The IRS has cleared the path for 401(k) sponsors who wish to expand clients’ use of longevity insurance within 401(k)s by allowing target date funds (TDFs) to include deferred annuities, even for those plan participants who do not actively manage their investment allocations.

Building on their engagement in the earlier phase of the BEPS Project, about 10 developing countries, including: Albania, Jamaica, Kenya, Peru, Philippines, Senegal, and Tunisia, will be invited to participate in meetings of the key BEPS decision making body – the Committee on Fiscal Affairs (CFA) – and its technical working groups. Several other developing countries are expected to confirm their participation in the CFA or the technical working groups in the coming weeks.

Five regionally organised networks of tax policy and administration officials will be established, to coordinate an ongoing and more structured dialogue with a broader group of developing countries on BEPS issues. Building on the effective BEPS consultations that took place in 2013 and 2014; these networks will strengthen the involvement of developing countries in Asia, Africa, Central Europe and the Middle East, Latin America and the Caribbean, and Francophone countries.

Support for capacity building to address BEPS issues in developing countries is imperative. The regional networks will play an important role in the development of toolkits needed to support the practical implementation of the BEPS measures and as well as some of the priority issues for developing countries (tax incentives and transfer pricing comparable data) which are outside the BEPS Action Plan. The regional networks will also be a forum for interested developing countries to discuss the negotiation and implementation of the multilateral instrument under Action 15 of the BEPS Project.

The African Tax Administration Forum (ATAF) and the Inter-American Centre for Tax Administration (CIAT) will continue to play a critical role in leading regional discussions on the BEPS priority issues for developing countries. They will help ensure those views are reflected in discussions on the development of the BEPS measures and the practical tools for supporting implementation. They will also be invited to join the meetings of the CFA and the technical working groups, together with the international organisations (the IMF, the World Bank Group and the UN), which already participate.

A two-part report from the G20 Development Working Group shows that BEPS issues pose acute problems for developing countries, most of which have lower tax bases than advanced economies and raise a far higher share of tax revenues from corporate taxes than developed countries. The report drew extensively on engagement with developing countries: more than 80 developing countries and other non-OECD/non-G20 economies were consulted through four in-depth regional consultations and five thematic global fora in the first phase of the BEPS Project.

The report was presented last September to the G20 Finance Ministers who called on the OECD to develop a new structured dialogue process for deepening developing country engagement in tackling BEPS issues and ensuring that their concerns are addressed. Developing countries have consistently recognised the importance of addressing base erosion and profit shifting as part of wider measures to increase domestic resource mobilisation, in order to promote stable economic growth and invest in infrastructure, education and health, among other government priorities.

A two-day workshop in December 2014 will allow developing countries interested in participating in the BEPS work of the Committee on Fiscal Affairs (CFA) and its technical working groups to discuss the practical aspects of deepened engagement in the Project, as well as their priority issues. At the same time, the donor community will meet to discuss plans to ensure that developing countries have the resources necessary to engage in the BEPS project effectively.

The OECD released last September its first recommendations towards coherent international tax rules to end the erosion of national tax bases and the artificial shifting of profits to jurisdictions to avoid paying tax. The recommendations were endorsed by G20 Finance Ministers during a meeting in Cairns, Australia last September and will be discussed during the Leaders’ Summit that will take place on15-16 November in Brisbane.

Article 7 of the Model 1 IGA provides that the United States shall notify its partner jurisdictions of any more favorable terms under Article 4 or Annex I of the IGA afforded to another partner jurisdiction.

Based on the BVI IGA, the United States considers the language in italics to be “more favorable
terms” in Annex I, except in those cases where the Agreement already includes such language:

1. Paragraph G of Section VI of Annex I:

G. Alternative Procedures for New Accounts Opened Prior to Entry Into Force of this Agreement.

2. Paragraph H of Section VI of Annex I:

H. Alternative Procedures for New Entity Accounts Opened on or after July 1, 2014, and before January 1, 2015.

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If you are looking for a tax deduction, giving to charity can be a ‘win-win’ situation. It’s good for them and good for you. Here are eight things you should know about deducting your gifts to charity:

1. You must donate to a qualified charity if you want to deduct the gift. You can’t deduct gifts to individuals, political organizations or candidates.

2. In order for you to deduct your contributions, you must file Form 1040 and itemize deductions. File Schedule A, Itemized Deductions, with your federal tax return.

3. If you get a benefit in return for your contribution, your deduction is limited. You can only deduct the amount of your gift that’s more than the value of what you got in return. Examples of such benefits include merchandise, meals, tickets to an event or other goods and services.

4. If you give property instead of cash, the deduction is usually that item’s fair market value. Fair market value is generally the price you would get if you sold the property on the open market.

5. Used clothing and household items generally must be in good condition to be deductible. Special rules apply to vehicle donations.

6. You must file Form 8283, Noncash Charitable Contributions, if your deduction for all noncash gifts is more than $500 for the year.

7. You must keep records to prove the amount of the contributions you make during the year. The kind of records you must keep depends on the amount and type of your donation. For example, you must have a written record of any cash you donate, regardless of the amount, in order to claim a deduction. It can be a cancelled check, a letter from the organization, or a bank or payroll statement. It should include the name of the charity, the date and the amount donated. A cell phone bill meets this requirement for text donations if it shows this same information.

8. To claim a deduction for donated cash or property of $250 or more, you must have a written statement from the organization. It must show the amount of the donation and a description of any property given. It must also say whether the organization provided any goods or services in exchange for the gift.

I am just one weekend away from completing the 3rd edition of Lexis’ Guide to FATCA Compliance. Deep into my analysis of these challenging issues, editing, cross-referencing, and amalgamation of over 70 expert contributors analysis and perspectives (including Haydon Perryman). All the FATCA activity this year has spawned 54 chapters of over 1,000 of legal, operational and compliance analysis. I hope that I have been as pedantic as the previous years with catching every typo, cross reference link, footnote citation, and consistent style / grammar / punctuation.

Last month, the GIIN list included 104,344, a jump from the September list of 5,000 from 99,861 FFIs (mind you that a substantial number of these registrations are not unique, but instead represent affiliates within EAGs) – see our previous analysis links below. It is now November. The UK self-imposed (yet ignored) deadline to GIIN register passed October 25th.

This update supplements the Instructions for the Requester of Forms W-8BEN, W-8BEN-E, W-8ECI, W-8EXP, and W-8IMY (Rev. July 2014) and provides additional information for withholding agents and foreign financial institutions (FFIs) requesting such forms. This update makes certain corrections and provides additional clarifying information not included in the instructions. A requester of a Form W-8BEN, W-8BEN-E, W-8ECI, W-8EXP, or W-8IMY may rely on this update, which will be incorporated in the next issuance of the instructions.

On page 3, the instructions state that if the requester receives a Form W-9, it must generally make an information return on a Form 1099 unless the payee has provided a valid exempt recipient code. This instruction does not modify the existing requirements for a valid Form W-9 or impose additional information reporting requirements with respect to payments reportable on Form 1099 on the requester of a Form W-9. For those requirements, see the Instructions for the Requester of Form W-9.

On page 5, the instructions for the requester of a Form W-8BEN-E state that a “foreign reverse hybrid entity” making a claim for treaty benefits on its own behalf should provide a Form W-8BEN-E. The correct reference is to a “foreign hybrid entity” rather than “foreign reverse hybrid entity.”

On page 6, the instructions state that for a requester receiving a Form W-8BEN-E, a valid chapter 4 status is not required for a payment that is subject to chapter 3 withholding and is not a withholdable payment when the payment is made with respect to a preexisting obligation before January 1, 2016. The correct date for this purpose is before July 1, 2016.

On page 7, the instructions provide notes for a requester in validating a Form W-8BEN-E, including for Part I, Line 4 “Chapter 3 Status,” which is used by the person providing the Form W-8BEN-E to indicate its chapter 3 status. The instructions do not provide any exceptions for when this line is not required to be completed. This cover sheet clarifies that if Form W-8BEN-E is requested by an FFI solely for purposes of documenting the chapter 4 status of its account holder and the form is also not associated with a withholdable payment or with a reportable amount (as defined in Treas. Reg. § 1.14411(e)(3)(vi)), then Part I, Line 4 “Chapter 3 Status” is not required to be completed

On page 9, the instructions for the requester of Form W-8IMY state that when the Form W-8IMY is provided by a qualified securities lender (QSL), the payor may make payments of substitute dividends to the QSL without requiring a withholding statement when the QSL is a qualified intermediary (QI) or provides a written statement that it is not acting as an intermediary. However, consistent with Notice 2010-46, because a QSL (whether or not it is a QI or acting as an intermediary) does not provide a withholding statement to a withholding agent for substitute dividend payments, it need not provide the written statement described in the instructions, and the requestor may treat an entity as a QSL even when it knows that it is not acting as an intermediary for such payments.

On page 10, the instructions provide that the requester must obtain a Form W-8IMY from a QSL when the requester is required to determine the QSL’s chapter 4 status but may continue to rely on a written certification provided by the QSL pursuant to Notice 2010-46 when the QSL’s chapter 4 status is not required. For clarification, when the requestor obtains a Form W-8IMY from a QSL, the transitional provisions of Section III.C of Notice 2010-46 remain applicable to the QSL with respect to the annual statement requirement, and the QSL must therefore also provide to the requestor a statement at least annually, whether on a Form W-8IMY or on the separate statement described in the Notice.

On page 14, the instructions provide guidelines for the use of non-IRS forms for individuals. For clarification, the non-IRS form is not to be used in association with a payment that is a reportable amount (as defined in Treas. Reg. § 1.1441-1(e)(3)(vi)). Instead, the individual must provide a Form W-8BEN or an acceptable substitute (as defined in Treas. Reg. § 1.1441-1(e)(4)(vi)).

The tax items for tax year 2015 of greatest interest to most taxpayers include the following dollar amounts –

The tax rate of 39.6 percent affects singles whose income exceeds $413,200 ($464,850 for married taxpayers filing a joint return), up from $406,750 and $457,600, respectively. The other marginal rates – 10, 15, 25, 28, 33 and 35 percent – and the related income tax thresholds are described in the revenue procedure.

The standard deduction rises to $6,300 for singles and married persons filing separate returns and $12,600 for married couples filing jointly, up from $6,200 and $12,400, respectively, for tax year 2014. The standard deduction for heads of household rises to $9,250, up from $9,100.

The limitation for itemized deductions to be claimed on tax year 2015 returns of individuals begins with incomes of $258,250 or more ($309,900 for married couples filing jointly).

The personal exemption for tax year 2015 rises to $4,000, up from the 2014 exemption of $3,950. However, the exemption is subject to a phase-out that begins with adjusted gross incomes of $258,250 ($309,900 for married couples filing jointly). It phases out completely at $380,750 ($432,400 for married couples filing jointly.)

The Alternative Minimum Tax exemption amount for tax year 2015 is $53,600 ($83,400, for married couples filing jointly). The 2014 exemption amount was $52,800 ($82,100 for married couples filing jointly).

The 2015 maximum Earned Income Credit amount is $6,242 for taxpayers filing jointly who have 3 or more qualifying children, up from a total of $6,143 for tax year 2014. The revenue procedure has a table providing maximum credit amounts for other categories, income thresholds and phaseouts.

Estates of decedents who die during 2015 have a basic exclusion amount of $5,430,000, up from a total of $5,340,000 for estates of decedents who died in 2014.

For 2015, the exclusion from tax on a gift to a spouse who is not a U.S. citizen is $147,000, up from $145,000 for 2014.

For 2015, the foreign earned income exclusion breaks the six-figure mark, rising to $100,800, up from $99,200 for 2014.

The annual exclusion for gifts remains at $14,000 for 2015.

The annual dollar limit on employee contributions to employer-sponsored healthcare flexible spending arrangements (FSA) rises to $2,550, up $50 dollars from the amount for 2014.

Under the small business health care tax credit, the maximum credit is phased out based on the employer’s number of full-time equivalent employees in excess of 10 and the employer’s average annual wages in excess of $25,800 for tax year 2015, up from $25,400 for 2014.

.01 Tax Rate Tables. For taxable years beginning in 2015, the tax rate tables under § 1 are as follows:

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My long time friend and colleague, Ross Jeffries is holding a soft skills/persuasion training in Los Angeles, January 23, 24 and 25th that I urge you to attend.

I first met Ross over 7 years ago; I had heard his name mentioned in many events on the subject and had a look at this work. I was so impressed I actually went to the effort of paying for an event where he was guest speaking, just so I could meet him. I can say this without hesitation: he knows more about persuasion and how language can move people’s emotions, decisions and actions that anyone else I have ever met.

As you know, getting your message across(whether in print or in person) and changing minds is a major and important part of a career in law, especially if your focus is business.

If you are an alumni, go here: http://www.persuasionmastercamp.com. Use the code JEFFERSON and receive a 20% discount on the event. Room seating is limited to 100 people, and his trainings are quite interactive.

Obtain the three Tax Facts Editions: 2015 Tax Facts on Insurance & Employee Benefits,2015 Tax Facts on Investments, and Tax Facts on Individuals & Small Business with the convenience of a single order and a savings of $99! The 2015 editions are filled with updated, authoritative, and clear answers to critical tax questions covering insurance, employee benefits, investments, business formation/choice of entity, individual income taxation and much more! Pertinent planning points are provided throughout.

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FATCA filing requirements of certain foreign financial institutions (FFIs). If you are required to report an account that is a U.S. account under chapter 4 of the Code (chapter 4), you may be eligible to elect to report the account on Form(s) 1099 instead of on Form 8966, “FATCA Report.”

Caution: If the account is either a U.S. account held by a passive NFFE that is a U.S. owned foreign entity or an account held by an owner-documented FFI, do not file a Form 1099 with respect to such an account. Instead, you must file a Form 8966, “FATCA Report,” in accordance with its requirements and its accompanying instructions to report the account for chapter 4 purposes.

Election described in Regulations section 1.1471-4(d)(5)(i)(A). You are eligible to make this election to report an account on Form(s) 1099 if–

You are a participating FFI (including a Reporting Model 2 FFI) (PFFI) or are a registered deemed-compliant FFI (RDC FFI) (other than a Reporting Model 1 FFI) required to report a U.S. account as a condition of your applicable RDC FFI status (see Regulations section 1.1471-5(f)(1)(i));

You are required to report the account as a U.S. account for chapter 4 purposes; and

The account is a U.S. account held by a specified U.S. person that you elect to report under Regulations section 1.1471-4(d)(5)(i)(A).

Election described in Regulations section 1.1471-4(d)(5)(i)(B) . You are eligible to make this election to report an account on Form(s) 1099 if–

You are a PFFI or are a RDC FFI (other than a Reporting Model 1 FFI) required to report a U.S. account as a condition of your applicable RDC FFI status (see Regulations section 1.1471-5(f)(1)(i));

You are required to report the account as a U.S. account for chapter 4 purposes; and

The account is a U.S. account held by a specified U.S. person that is a cash value insurance contract or annuity contract that you elect to report under Regulations section 1.1471-4(d)(5)(i)(B) in a manner similar to section 6047(d).

You may make an election described in Regulations section 1.1471-4(d)(5)(i)(A) or (B) either with respect to all such U.S. accounts or, separately, with respect to any clearly identified group of such accounts (for example, by line of business or by the location where the account is maintained).

Special reporting by U.S. payer described in Regulations section 1.1471-4(d)(2)(iii)(A). If you are a U.S. payer that is a PFFI other than a U.S. branch, you also may satisfy your requirement to report with respect to a U.S. account for chapter 4 purposes by reporting on each appropriate Form 1099 in the manner described in Regulations section 1.1471-4(d)(2)(iii)(A).

Reporting procedures. If you are an FFI that is eligible to make an election described in Regulations section 1.1471-4(d)(5)(i)(A) or (B) or are a U.S. payer reporting as described in Regulations section 1.1471-4(d)(2)(iii)(A), you must do so by filing each appropriate Form 1099 with the IRS and reporting the payments required to be reported by a U.S. payer (as defined in Regulations section 1.6049-5(c)(5)) with respect to the account.

Tip: All Form 1099 filers must have an EIN. If you have not previously filed a Form 1099 or other return, you must obtain an EIN and include it on each Form 1099 that you file. See part K for more information, including how to obtain an EIN.

In addition to the information otherwise required to be reported on the appropriate Form 1099, you also must include the following information for each account you are reporting as described in Regulations section 1.1471-4(d)(2)(iii)(A) or (d)(5)(i)(A) or (B):

The name, address, and TIN of the account holder;

The account number; and

If applicable, the jurisdiction of the branch that maintains the account being reported by adding the branch’s jurisdiction after the payer’s name, that is, “Payer’s Name (Jurisdiction X branch)”.

Caution: If you are an FFI making an election described in Regulations section 1.1471-4(d)(5)(i)(A) or (B) or are a U.S. payer reporting as described in Regulations section 1.1471-4(d)(2)(iii)(A), you are required to report the payee’s account number on each Form 1099 you file (regardless of the fact that the account number otherwise may be optional for purposes of reporting on the applicable Form 1099).

Sponsored FFIs. If you are a sponsoring entity that is reporting a U.S. account on behalf of a sponsored FFI, report on the appropriate Form(s) 1099 the following information in the payer boxes (if filing on paper) or in the appropriate fields of the payer record (if filing electronically):

For the name, enter the sponsored FFI’s name on the first line and the sponsoring entity’s name on the second line.

In addition, if you are filing electronically, enter numeric code “1” in the “Transfer Agent Indicator” field. See Publication 1220 for electronic filing of forms. If you are filing on paper, enter your GIIN in the lower right hand portion of the title area on the top of Form 1096, Annual Summary and Transmittal of U.S. Information Returns. For transmittal of paper forms, see Form 1096 and its accompanying instructions.

Transitional rule. Calendar year 2014 is a transitional year for FFIs to report their U.S. accounts. If you make the election for 2014, you are required to report the account, but you are not required to report any payments pursuant to the election. Even though reporting of payments to an account is not required for 2014, FFIs making the election described in Regulations section 1.1471-4(d)(5)(i)(A) or (B) for 2014 are required to report accounts to which no payments are made on Form 1099-MISC and enter “$1” in Box 3. Remember to include the name (including the jurisdiction of the branch, if applicable), address, and TIN of the account holder, along with the account number on the Form 1099.

Caution: If you made payments to the account that you are otherwise required to report on Form(s) 1099 for purposes of chapter 61 (for example, because you are a U.S. payer), making an election described in Regulations section 1.1471-4(d)(5)(i)(A) or (B) does not affect your obligation to report such payments on the applicable Form 1099 in accordance with the requirements under chapter 61. See the separate specific instructions for each Form 1099 to determine which Form(s) 1099 to file.

Definitions

For detailed information about definitions that apply for purposes of chapter 4 generally, see Regulations section 1.1471-1(b). A Reporting FI under a Model 2 IGA should also refer to definitions that may apply under that IGA or apply pursuant to any applicable domestic law pertaining to its FATCA obligations. Solely for purposes of filing Forms 1099, the following definitions are provided to help guide filers through the process.

Account. An account means a financial account described in Regulations section 1.1471-5(b), including a cash value insurance contract and annuity contract.

Account holder. An account holder is the person who holds a financial account, as determined under Regulations section 1.1471-5(a)(3).

Foreign financial institution (FFI). Except as otherwise provided for certain foreign branches of a U.S. financial institution, a foreign financial institution means a financial institution that is a foreign entity. The term foreign financial institution also includes a foreign branch of a U.S. financial institution with a QI Agreement in effect.

Owner-documented FFI. An owner-documented FFI is an FFI described in Regulations section 1.1471-5(f)(3).

Participating FFI (PFFI). A PFFI is an FFI, or branch of an FFI, that has in effect an FFI agreement with the IRS, and includes a Reporting Model 2 FFI.

Registered deemed-compliant FFI (RDC FFI). A registered deemed-compliant FFI is an FFI described in Regulations section 1.1471-5(f)(1), and includes a Reporting Model 1 FFI, a QI branch of a U.S. financial institution that is a Reporting Model 1 FFI, and a nonreporting FI treated as a registered deemed-compliant FFI under a Model 2 IGA.

Reporting Model 1 FFI. A Reporting Model 1 FFI is an FI, including a foreign branch of a U.S. financial institution, treated as a reporting financial institution under a Model 1 IGA.

Reporting Model 2 FFI. A Reporting Model 2 FFI is an FI or branch of an FI treated as a reporting financial institution under a Model 2 IGA.

Specified U.S. person. A specified U.S. person is any U.S. person described in Regulations section 1.1473-1(c).

Sponsored FFI. A Sponsored FFI is an investment entity or an FFI that is a controlled foreign corporation having a Sponsoring Entity that performs certain due diligence, withholding, and reporting obligations on behalf of the Sponsored FFI.

Sponsoring Entity. A Sponsoring Entity is an entity that has registered with the IRS to perform the due diligence, withholding, and reporting obligations of one or more Sponsored FFIs or Sponsored Direct Reporting NFFEs.

U.S. account. A U.S. account is any account held by one or more specified U.S. persons. A U.S. account also includes any account held by a passive NFFE that has one or more substantial U.S. owners, or in the case of a Reporting Model 2 FFI, any account held by a passive NFFE that has one or more controlling persons that are specified U.S. persons. See Regulations section 1.1471-5(a) and an applicable Model 2 IGA.

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This update supplements the Instructions for Form W-8BEN-E (Rev. June 2014) and provides additional information for foreign entities using the form. This update makes certain corrections and adds certain information not included in the instructions. A foreign entity using a Form W-8BEN-E (and the recipient of the form) may rely on this update, which will be incorporated in the next issuance of the instructions. See previous analysis of the instructions at https://profwilliambyrnes.com/2014/06/25/analysis-of-w-8ben-e-and-its-instructions-released-june-25/

Part I, Line 4 of Form W-8BEN-E referring to “Chapter 3 Status” is used for the entity providing the Form W-8BEN-E to indicate its chapter 3 status. On page 7, the instructions to Form W-8BEN-E do not provide any exceptions for when this line is not required to be completed. This update to the instructions clarifies that an entity providing Form W-8BEN-E is not required to complete Line 4 if the form is requested by an FFI solely for purposes of documenting the chapter 4 status of the entity that is an account holder and the form is not associated with a withholdable payment or with a reportable amount (as defined in Treas. Reg. § 1.1441-1(e)(3)(vi)) paid to such entity.

If the entity providing the Form W-8BEN-E has indicated in Part I, Line 4 that it is a disregarded entity, partnership, simple trust, or grantor trust, Part I, Line 4 also asks whether the entity is a hybrid entity making a treaty claim (and, if so, directs the entity to complete Part III). This update to the instructions provides that if the disregarded entity, partnership, simple trust, or grantor trust is an account holder of an FFI and is using the form solely for purposes of documenting its chapter 4 status to the FFI and the form is not associated with a withholdable payment or a reportable amount (as defined in Treas. Reg. § 1.1441-1(e)(3)(vi)), it may check “No” on Line 4 if it otherwise completes Part I, Line 4, notwithstanding that it is not required to provide a status for chapter 3 purposes.

On page 6, the instructions state in the definition of “substantial U.S. owner” that a territory NFFE must disclose its substantial U.S. owners if it cannot qualify as an excepted territory NFFE. This update to the instructions clarifies that a territory NFFE that qualifies as an excepted NFFE pursuant to any of the categories described in Treas. Reg. § 1.1472-1(c)(1), which includes an excepted territory NFFE, is not required to disclose its substantial U.S. owners.

On page 10, the instructions include examples of when an entity should complete Line 15 of Form W-8BEN-E, “Special rates and conditions.” The example requiring entities claiming treaty benefits under an “other income” article should be ignored. This update to the instructions clarifies that entities receiving payments of income eligible for treaty benefits under an “other income” article generally will not be required to complete Line 15, unless the claim of treaty benefits requires the payee to meet conditions not covered by the representations made in Line 14.

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If you look for a new job in the same line of work, you may be able to deduct some of your job hunting costs.

Here are some key tax facts you should know about if you search for a new job:

Same Occupation. Your expenses must be for a job search in your current line of work. You can’t deduct expenses for a job search in a new occupation.

Résumé Costs. You can deduct the cost of preparing and mailing your résumé.

Travel Expenses. If you travel to look for a new job, you may be able to deduct the cost of the trip. To deduct the cost of the travel to and from the area, the trip must be mainly to look for a new job. You may still be able to deduct some costs if looking for a job is not the main purpose of the trip.

Placement Agency. You can deduct some job placement agency fees you pay to look for a job.

First Job. You can’t deduct job search expenses if you’re looking for a job for the first time.

Work-Search Break. You can’t deduct job search expenses if there was a long break between the end of your last job and the time you began looking for a new one.

Reimbursed Costs. Reimbursed expenses are not deductible.

Schedule A. You usually deduct your job search expenses on Schedule A, Itemized Deductions. You’ll claim them as a miscellaneous deduction. You can deduct the total miscellaneous deductions that are more than two percent of your adjusted gross income.